Third‐Degree Price Discrimination in Oligopoly when Markets are Covered

Artikel

We analyze oligopolistic third‐degree price discrimination relative to uniform pricing when markets are covered. Pricing equilibria are critically determined by supply‐side features such as the number of firms and their marginal cost differences. It follows that each firm's Lerner index under uniform pricing is equal to the weighted harmonic mean of the firm's relative margins under discriminatory pricing. Uniform pricing then lowers average prices and raises consumer surplus. We can calculate the gain in consumer surplus and loss in firms' profits from uniform pricing based only on the market data of the discriminatory equilibrium (i.e., prices and quantities).

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: The Journal of Industrial Economics ; ISSN: 1467-6451 ; Volume: 71 ; Year: 2023 ; Issue: 2 ; Pages: 464-490 ; Hoboken, NJ: Wiley

Classification and Topics

• Classification: Wirtschaft

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Dertwinkel‐Kalt, Markus ; Wey, Christian
• Event: Veröffentlichung
• (who): Wiley
• (where): Hoboken, NJ
• (when): 2023

Further information

• DOI: doi:10.1111/joie.12325
• Last update: 10.03.2025, 11:42 AM CET